Spain ends Golden Visa programme: What it means for foreign investors

Excerpt Alongside the abolition of the Golden Visa, the new legislation introduces fast-track legal proceedings for property squatting cases, aiming to streamline the eviction process for landlords

Spain's Congress has approved the termination of the controversial Golden Visa programme, a move that has sparked significant debate across the political spectrum and among international investors. Spain's  decision to officially end its "Golden Visa" programme means that non-EU investors can no longer obtain residency by investing in Spanish real estate. This change reflects a broader shift in the country’s immigration and housing policies, emphasizing local housing needs over foreign investment.

 

Additionally, the introduction of fast-track legal proceedings for cases of property squatting aims to address issues of unauthorized occupation of properties. This new measure will expedite the legal process for landlords seeking to reclaim their properties, potentially offering quicker resolutions in disputes involving squatting.

 

The Organic Law on Measures for the Efficiency of the Public Justice Service was approved by the Spanish Congress on December 19, passing narrowly with 177 votes in favour and 170 against. The law will take effect once published in the Official State Gazette (BOE).

 

What are the consequences of this move?

 

The program, introduced in 2013, allowed non-European Union citizens to obtain residency permits by investing a minimum of €500,000 in Spanish real estate. Supporters of the programme argued that it boosted foreign investment and contributed to the economic recovery following the financial crisis. However, critics have raised concerns about its impact on housing affordability, as well as potential links to money laundering and tax evasion.

 

The termination of Spain's Golden Visa program means that foreign nationals can no longer gain residency by investing at least €500,000 in Spanish real estate.

 

Prime Minister Pedro Sánchez announced the decision to abolish the program in April 2024, reflecting concerns about its effects on local housing markets and rising property prices. The termination was finalized through an amendment to recent legislation aimed at improving public justice efficiency, which was recently approved by Congress.

 

Proponents of the termination cited the need to address rising property prices and ensure housing availability for local citizens, particularly in major cities like Madrid and Barcelona, where demand has surged in recent years.

 

Opponents of the decision argue that ending the program could deter foreign investment and negatively impact the Spanish economy, particularly in the real estate sector. They warn that the loss of the Golden Visa may lead to a decline in foreign buyers, which could exacerbate economic challenges in the post-pandemic recovery.

 

The government has indicated plans to explore alternative measures to attract foreign investment while ensuring housing security for its citizens. Meanwhile, stakeholders in the real estate market are closely monitoring the situation, anticipating potential shifts in market dynamics.